ARIZONA NEWS

Booming rental income in Phoenix expected to slow

Sep 15, 2015, 7:37 AM

(AP Photo/Mel Evans)...

(AP Photo/Mel Evans)

(AP Photo/Mel Evans)

What goes up, must eventually level off, so say those keeping a close watch on the rental market in Phoenix and other parts of the country.

It’s a good time to be an investor in rental property with surging costs and low vacancy rates. But with the supply of apartments rising, and renters looking to buy as the economy improves, investors shouldn’t expect those soaring rental incomes to continue for much longer.

Tina Tamboer of “The Cromford Report” told KTAR’s That Real Estate Show the high cost of rent is forcing renters to take a closer look at putting money into property they can call their own.

“If you’re actually trying to control your monthly income, renting is probably not the best idea for you,” she said. “If you’re able to qualify, if you really want to fix your monthly expenses, get a 30-year fixed mortgage rate.”

Tamboer added the increase in average rent per month per square foot across the greater Phoenix area has accelerated more over the past two years than it did between 2000-2013.

“Rent is now the one thing in the American economy that is rising faster than anything else,” she said.

Published as a contributor for Forbes, Lawrence Yun, the chief economist of the National Association of Realtors, offered a number of reasons for why we should expect a tapering off of soaring rental income.

Yun pointed out that construction activity on apartments is already above the historical norm and that steady job growth, along with falling debt levels (outside of student loans) should help renters improve their credit scores and put them in a better position to buy homes.

Yun also made note of so-called boomerang buyers re-entering the housing market after foreclosures and short sales forced many into rentals during the housing crisis.

He emphasized that while there may still be room for rental income growth for another year or two, we should also expect a slowdown in rental housing and rental income in the not-too-distant future.

Join Realtor Diane Brennan for That Real Estate Show Sundays at 8 a.m. on KTAR News 92.3 FM.

We want to hear from you.

Have a story idea or tip? Pass it along to the KTAR News team here.

Arizona News

Two Valley freeway ramps will be closed for the next two months....

Kevin Stone

2 Valley on-ramps closing for 2 months as part of freeway improvement projects

A couple of metro Phoenix freeway ramps are closing for the next two months as part of ongoing improvement projects.

2 hours ago

Honeywell Aerospace...

Collin Huguley and Jeff Gifford/Phoenix Business Journal

Phoenix-based Honeywell Aerospace to go its own way amid company split

Phoenix-based Honeywell Aerospace Technologies is going to become a separate entity now that Honeywell International Inc. plans to follow through with a major shake-up.

3 hours ago

fatal shooting southeast Phoenix one man dead...

Payne Moses

Police investigating fatal shooting that left 1 man dead in southeast Phoenix

Phoenix police are investigating a fatal shooting in southeast Phoenix on Friday that left one man dead. The incident is being viewed as an act of self-defense.

11 hours ago

Phoenix woman hit killed by car West Phoenix...

Payne Moses

Woman dead after hit by car while crossing street in west Phoenix

An adult woman was struck and killed by a car on Friday while crossing a street in west Phoenix, authorities said.

12 hours ago

I17 Bumble Bee bridge ADOT construction Feb. 10-12 overnight...

Payne Moses

I-17 overnight closures next week to remove old Bumble Bee bridge

The southbound Interstate 17 will be closed overnight from Monday to Wednesday due to scheduled reconstruction of the Bumble Bee bridge.

13 hours ago

asthma GSK Arizona AG Kris Mayes sues for exploiting drug maker...

Payne Moses

Arizona AG accuses asthma drug maker of scheming to avoid Medicaid rebates

Arizona Attorney General Kris Mayes on Thursday sued drug producer GlaxoSmithKline (GSK) for harm done to asthma patients by discontinuing a long-time product.

15 hours ago

Sponsored Articles

...

Asset Preservation Wealth & Tax

How to optimize the most money in 2024 tax returns

As tax season begins, getting your financials in order is important to maximize your tax return.

...

Sanderson Ford

Sanderson Ford’s Operation Santa Claus: Spreading holiday cheer through pickleball

Phoenix, AZ – Sanderson Ford, a staple in the Arizona community, is once again gearing up for its annual Operation Santa Claus charity drive.

...

Day & Night Air Conditioning, Heating and Plumbing

Why a Heating Tune-Up is Essential Before Winter

PHOENIX, AZ — With cooler weather on the horizon, making sure your heating system is prepped and ready can make all the difference in staying comfortable this winter.

Booming rental income in Phoenix expected to slow